Controversial pay deals for the management of the Co-operative Group should be scrapped and more consultation take place ahead of any reforms to the loss-making mutual, an MP will say on Friday.

Fuelling the row about how to overhaul the company's troubled chain of supermarkets, funeral homes and pharmacies, Meg Hillier is also expected to tell a conference in Manchester, home to the Co-op, that bold steps are needed to revive the 150-year-old organisation.

The conference comes on the eve of a crucial vote on proposals set out by Lord [Paul] Myners to reform the group by creating a slimmed-down board, populated by professionals, and forming a national members council.

Hillier is also expected to urge the group to proceed with caution over its response to the "have your say survey" launched by Euan Sutherland just before he quit as chief executive in March.

Sutherland's temporary replacement, Richard Pennycook, (who will become chief operating officer once a new head is found) was paid £1.3m, including a £750,000 retention bonus for six months' work last year. He is also in line for a long-term share award of up to another £750,000.

On Thursday Myners hit back at critics of his proposals – which also include setting up a nominations committee to oversee appointments to the new-look board.

"I am confident that highly talented individuals can be found who will be attracted by that potential challenge. Not because they want to make money out of the Co-op or otherwise take advantage of the organisation."

Hillier, who is a Co-op MP, will tell delegates that the ideas set out by Myners do not give members enough of a say in the organisation, which traces its roots back to the Rochdale pioneers of 150 years ago.

"Lord Myners, a member of a body determined mostly by patronage and partly by primogeniture, seems to have lost sight of any democracy in his proposals for reform. Yet without a democratic structure, we cease to be a co-operative. It's as simple and stark as that," Hillier is expected to say.

Members of the Co-op, which is 78% owned by eight million members through seven regional boards, and 22% owned by independent societies, are to vote on a resolution linked to Myners' principles at the group's annual meeting on Saturday.

Myners is resigning at the meeting, after just five months as the only independent director on the board.

Hillier will also call on the group not to abandon its dividend, currently on hold because of last year's £2.5bn losses.

She claimed the "have your say survey", which she said cost £1.5m, was "an unnecessary, expensive and undemocratic farce".